Resolution Plan Below CoC’s Commercial Expectations: NCLT Approves Liquidation After Failed CIRP [Read Order]

The Hyderabad bench of the National Company Law Tribunal (NCLT), ordered the liquidation of SAPF Estates Private Limited after the Corporate Insolvency Resolution Process (CIRP) failed to secure a commercially viable resolution.

SAPF Estates Private Limited (the “Corporate Debtor”) was admitted into CIRP under Section 7 of the Insolvency and Bankruptcy Code (IBC) on 28.08.2024. Mr. Vijay P. Lulla was appointed as the Interim Resolution Professional (IRP). In compliance with statutory requirements, the IRP issued a public notice on 02.09.2024 inviting claims from creditors, receiving only a single claim from M/s Invent Assets Securitization and Reconstruction Private Limited, the financial creditor.

Following this, the IRP constituted the Committee of Creditors (CoC), which unanimously appointed Mr. Lulla as the Resolution Professional (RP) during its first meeting on 30.09.2024. While certain key documents were handed over by the erstwhile Director, no updates on the CD’s accounts were provided at that stage.

Subsequently, Form-G was published on 20.11.2024 inviting Expressions of Interest (EoIs) from prospective resolution applicants (PRAs). Out of multiple responses, only five PRAs submitted the required Earnest Money Deposit (EMD). The RP prepared the Provisional and Final Lists of PRAs and issued the Information Memorandum along with the Request for Resolution Plans (RFRP) on 21.12.2024. Valuers and Chartered Accountants were appointed to assess the CD’s assets and financial position.

Of the five PRAs, only M/s Great Value Industries Pvt. Ltd. submitted a Resolution Plan. The remaining four opted out and requested refund of their EMDs.

The RP submitted that the sole Resolution Plan was significantly below the commercial expectations of the CoC and did not adequately reflect the liquidation value of the CD’s assets. The CoC, in its 11th meeting on 23.07.2025, unanimously decided to reject the plan and recommended initiating liquidation proceedings under Section 33 of the IBC.

Mr. Lulla consented to act as the Liquidator, arguing that the IBBI Circular dated 18.07.2023 recommending appointment of a different professional is merely recommendatory.The RP emphasized that continuation of the CIRP would serve no productive purpose, given the absence of a viable resolution plan.

The CoC maintained that the submitted plan failed to protect creditor interests and was materially lower than the liquidation value. With 100% voting in favor, the CoC recommended liquidation and proposed the existing RP as Liquidator to ensure continuity.

The Tribunal observed that the Resolution Plan did not meet the commercial expectations of the CoC and was substantially below the liquidation value of the Corporate Debtor’s assets. Given the PRA’s unwillingness to enhance the Plan, the Tribunal concluded that continuing the CIRP would serve no fruitful purpose.

Exercising powers under Section 33(1) of the IBC, the NCLT ordered the liquidation of SAPF Estates Pvt. Ltd. The Tribunal also approved the appointment of Mr. Vijay P. Lulla as the Liquidator, noting that the IBBI circular is recommendatory and does not bind the CoC’s choice.

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